[Alpha Biz= Reporter Kim Jisun] The Korea Exchange has launched an investigation into Morgan Stanley over allegations of front-running involving SK Hynix stock. 

 

According to the financial investment industry on the 20th, the exchange is analyzing transactions after Morgan Stanley reportedly placed large sell orders for SK Hynix shares on the 13th, two days before releasing a sell report on the company.

The investigation will include an account analysis, and if any irregularities are found, the case will be referred to the Financial Supervisory Service (FSS). On the 13th, 1,011,719 SK Hynix shares were sold through Morgan Stanley’s Seoul branch, nearly three times the amount sold the previous day (351,228 shares).

However, some industry experts argue that simply executing trades through Morgan Stanley's own branch does not automatically indicate that the firm engaged in front-running.

In the report published on the 15th, Morgan Stanley downgraded SK Hynix’s target price from 260,000 won to 120,000 won and changed its recommendation from "overweight" to "underweight." The firm cited declining demand for standard DRAM in smartphones and PCs, along with oversupply issues in high-bandwidth memory (HBM), which could drive down prices.

Following the Chuseok holiday break from the 16th to the 18th, SK Hynix's stock price fell sharply by 6.14% when the domestic stock market reopened on the 19th.

 

 

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